Why Identity Authentication Should Be Preferred by Online Retailers?

Identity verification and identity authentication are two methods available to an online retailer to verify the credential of its customers. Both ways provide some security to the online transaction done online, but the latter one is more secure than the former because of the anonymity of the internet.

Identity verification is the process in which you are asked for your driver’s license, or any other govt. approved document that will verify who you are, what your age is, where you are from, etc. Identity verification involves verifying the identity of a person by asking for a document that one carries in his wallet. This is also called “out-of-wallet” document.

Why it is not consider secure on the Internet?

1. Because it could be stolen and misused.
2. Anyone can create a fake document.
3. Unlike face-to-face transaction of real world, common sense and physical verification is not possible on the Internet or telephonic conversation.

That is why online retailers use identity authentication. Identity authentication refers to the verification process in which the owner of the “out-of-wallet” document is asked some question about stuffs that is not mentioned on the document or identity proof provided by any agency. Example of this could be the question asked about past transactions, mother’s maiden name, last 3 transaction, amount borrowed, frequency of loan payments, etc. Depending upon the level of trust a retailer or its representative may ask for one or more such information.

This is considered to be more reliable way to verify the identity than the former because it is highly unlikely that the identity thief will have access to such hidden information about the guy he is pretending to be.

Identity verification works well in a situation where buyers and sellers interact face-to-face in the real world. But when facelessness of the Internet becomes part of the equation, mere identity verification prove to become very limited in providing the needed security against identity theft as well as against misuse of customers’ identity. This is where identity authentication comes in play.